Temporary Measures Of The Chongqing Municipality On The Administration Of The Collection Of Individual Income Tax From Construction And Decoration Workers, issued by Chongqing Local Taxation Bureau on September 28 and became effective on October 1,2007
(23/10/2007)
1. What dose the construction and decoration industry as referred to in the “measures” encompass?
The construction and decoration industry as referred to in the “Measures” encompasses projects of construction, installation, maintenance and improvement, decoration or other areas.
2. How would the competent taxation authorities assess and collect individual income tax if the units or individuals are not able to set up account books or to carry out accounting assessments accurately and completely?
The Units and individuals engaged in the construction and decoration industry should maintain account books, perfect their financial systems, and carry out accounting assessments accurately and completely. If they are not able to, competent taxation authorities may assess and collect individual income tax on receipts of the projects, basing on the size of their projects, the prices set forth in the contracts for the carrying out of the projects, and level of completion of the project.
3. Do the construction and decoration workers pay their individual income tax directly?
They don’t pay the individual income tax directly. It is paid by the corresponding tax withholders and declared by taxpayers. Units or individuals undertaking projects in the construction and decoration industry are the legal tax withholders who are obliged to withhold individual income tax in the course of making payment to individuals and pay individual income tax on their behalf.
4. How should units involved in construction projects pay their individual income tax?
They should pay individual income tax to the governments of the regions where the projects are located. However, units that distribute their income obtained from the construction projects in the region where the units are located and are able to provide complete and accurate account books to competent taxation authorities for assessment, may pay individual income tax to the governments of the regions where the units are located upon approval of the competent taxation authorities.
5. How do the new Measures apply to projects that were reported before or after the notice took effect?
For projects that have been reported to the taxation authorities of their respective regions before 1st October 2007, the calculation of tax for their completed portions shall be done according to the original tax calculating method. For the portion that has yet to be completed, the calculation of tax shall be done in accordance with the procedures and standards specified in the new “Measures”. For projects reported to the taxation authorities of their respective regions after 1st October 2007, the calculation of tax shall be done in accordance with the new Measures.
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